A sole proprietorship can be established on the same day. Limited companies can be established in the range of 1-3 days. Sole proprietorships can be shut down in a day. The liquidation period of limited companies continues for 6 months.[AP1]
Since individual companies are subject to income tax, taxation of profits is taxed at a rate of 15-20-27-35-40% according to the profit amount. As the limited company is subject to corporate tax, it is taxed at a rate of 22%, regardless of the profit amount.
Since there is no distribution of profits in a sole proprietorship, profits are not subject to a 15% stoppage tax. In the limited company, profits are subject to a 15% stoppage tax when distributing to partners.
The transfer of the share in the sole proprietorship becomes especially difficult. The share transfer agreement in the limited company is made through the notary.
The shareholders in the sole proprietorship are responsible for the company's commercial debts and public debts with all their possessions. In limited companies, shareholders are solely responsible for paying the capital they have committed to their commercial debts and responsible for the public receivables (public debts) with all their assets.
There is no need to have any capital commitment when establishing a sole proprietorship. Limited companies are formed with a capital commitment of at least 10,000 Turkish Liras.
The name and surname of the shareholder must be found in the company's trade title in a sole proprietorship. In a limited company, there is no such requirement.
Decisions in the sole proprietorship are taken without abiding any book. Some important decisions in limited companies must be made with the minute book of the board of directors.
In the sole proprietorship, people can use credit cards in their name for company business. Limited companies may use credit cards on behalf of the corporate entity.
In the sole proprietorship, the company can only keep the book according to the business procedure at the beginning. However, limited companies must keep a daybook, a ledger, and an inventory book since they are always obliged to keep books according to balance sheet procedure. Besides, the shareholders must keep the share book, the minute book of the board of directors and also the general assembly’s negotiation book.